Retailer Jumbo Groep to buy C1000 supermarket chain from CVC Capital Partners for €900M in a deal that will make Jumbo the Netherlands' second-largest supermarket chain
November 25, 2011
– Retailer Jumbo Groep Holding BV is planning to buy the C1000 supermarket chain from CVC Capital Partners Ltd., a private equity chain, for €900 million (US$1.197 billion) in a deal that will make Jumbo the Netherlands’ second-largest supermarket chain, The Wall Street Journal reported on Nov. 24, 2011.
According to the article, with the acquisition, Jumbo will have 725 stores in the Netherlands and an annual revenue of €7.5 billion.
The move will also give Jumbo a 23% share of the Netherlands grocery market, second only to Koninklijke Ahold NV’s chain Albert Heijn, which currently has a 33% share of the grocery market.
According to Jumbo officials, Jumbo intends to continue the C1000 brand.
Due to anti-trust restriction in various regions, Jumbo’s management team has indicated that it may need to sell off some C1000 stores.
Analysts predict that Jumbo’s acquisition of C1000 will hasten the consolidation of the Netherlands’ grocery market.
Competition within the Netherlands’ supermarket sector in highly competitive and, as customers head to discount stores to save money, upmarket retailers like Jumbo are having to safeguard their margins by broadening the scale of their operations.
According to Jumbo’s management, the acquisition deal, which is financed by a banking consortium made up of three Dutch banks: Rabobank Group, ING NY and ABN Amro Group, will most likely close during the first quarter of 2012.
Chief Executive Frits van Eerd said that Jumbo is not planning to pay off the debts incurred from this deal by using stock market float.
The original source of this article is the Wall Street Journal, New York, New York, on Nov. 24, 2011.